Ukraine’s National Securities and Stock Market Commission (NSSMC) has added two proprietary trading firms to its warning list, labeling them as “dubious projects.” The flagged firms, Alpine Funded and Aura Funded, were among seven names published by the regulator last week.

Regulatory Scrutiny Intensifies

Although NSSMC did not provide specific reasons for their inclusion, this is not the first time a prop firm has been flagged in Ukraine. In July 2024, the regulator warned against Forex Prop Firm, marking the beginning of its scrutiny over the industry. The same announcement also flagged BDSwiss, a well-known CFD broker.

Apart from these two prop firms, the latest list also includes a trading course provider and entities offering trading services in forex, stocks, and cryptocurrencies.

Interestingly, the flagged firms operate from different jurisdictions—Alpine Funded claims to be based in Switzerland, while Aura Funded appears to have a presence in Dubai.

Global Regulatory Pressure on Prop Firms

Prop trading firms have gained massive popularity in recent years, but this rise has also attracted regulatory attention worldwide. Unlike brokers, prop firms do not handle client deposits for trading. Instead, they generate revenue by selling funded account challenges, which traders must pass to access funded capital.

However, most firms operate under a demo trading model, meaning even those with “funded” accounts are often trading in simulated environments rather than real markets. This practice has drawn criticism from regulators:

• Belgium and Spain have issued warnings against prop firms.
  ‍
• Italy’s Consob compared them to “video games.”
  ‍
• India’s central bank has flagged two prop firms.
  ‍
• The pan-European regulator (ESMA) has conducted initial checks and discussed potential new regulations.
  ‍
• The Czech Republic’s regulator believes that some prop firms could fall under the MiFID II framework.

What’s Next for Prop Firms?

The inclusion of Alpine Funded and Aura Funded on Ukraine’s warning list could indicate a broader push for regulatory oversight in the industry.

As regulators across multiple jurisdictions take a closer look at prop trading business models, firms may soon be forced to adjust their structures or face potential restrictions. Will this scrutiny lead to new regulations, or is this just the beginning of a larger crackdown?

Stay tuned as PropInsider continues to track the evolving landscape of prop trading regulations..